Utah: The Consumer Tech Hub

This article was originally published in the Spring 2017 edition of Silicon Slopes Magazine.

Long known for producing great enterprise software products and companies, Utah is on the road to similar renown in consumer tech. The same region that gave rise to the likes of Novell, Omniture, Domo, Qualtrics, InsideSales, and others is now producing some of the most creative and popular consumer products, services, and apps on the market.

Take WildWorks, whose AnimalJam.com game boasts over 65 million players in 170 countries. Or the photo-printing startup Chatbooks, with over a million books printed. Add to the list other consumer oriented companies and applications like Control4, Homie, Owlet, Traeger Grills, Cotopaxi, Freshly Picked, Bubble, Ancestory.com, and Jane.com — to name only a few.

When we first launched Signal Peak Ventures, we initially focused on the enterprise technology and B2B software that has made Utah a regional tech hub. The entrepreneurs in the region never cease to surprise and delight us, however. A new batch of consumer technologies and products, produced by young entrepreneurs with the passion and design skills necessary to create and market exciting consumer facing products, are fueling our enthusiasm to fund more consumer startups in the state.

“The talent pool of computer engineers, digital artists and animators in Utah is astounding,” said WildWorks CEO Clark Stacey. “The workforce talent here is perennially refreshed not only by in-state colleges and universities, but by seasoned professionals fleeing the congestion and high cost of living in other hub cities like San Francisco and Seattle.”

Utah originally became a tech hub for reasons that are now well-known across the nation. A combination of the low cost of living, stellar engineering talent from top-tier universities, a high quality of life, and business-friendly governance have buoyed entrepreneurship in the state for decades.

Less well-known are the state’s consumer software roots. Ancestry.com, a $1 billion company, originated here, as did Overstock, Backcountry.com and Vivint. Utah has long been an important development hub in the $30 billion U.S. video game industry, local companies are behind industry tentpole franchises including The Sims, Twisted Metal, NBA Jam, Mortal Kombat and Disney’s Infinity game/toy crossover.

“We moved our startup to Utah because we knew there would be entrepreneurs and investors that we could learn from,” said Chatbooks CEO Nate Quigley, who moved the company from Florida in 2013. “The scrapbooking industry was invented here, and we are building the next generation of how to capture and hold onto memories.”

Quigley and his co-founder/wife Vanessa rented an office inside of the Ancestry.com building in order to connect with like-minded businesspeople. As Quigley puts it: “Utah is an entrepreneurship state, not a SaaS state.”

Utah hasn’t seen as many consumer venture deals in the past because investors — who are accustomed to looking for heavy technical strength and long-term defensibility — have shied away from the seemingly riskier, user-based growth strategies employed by consumer apps. Yet Utah entrepreneurs are currently demonstrating an exceptional ability to market and brand to the masses, whether across social platforms or through more traditional means.

“Utah isn’t just full of great technical talent, we punch above our weight in creative talent too,” said Quigley. “People in Utah want to contribute. Just walking down the street you can sense the desire to build and create, to make a mark. That kind of ‘beehive’ energy is exactly what a consumer startup needs. If you can be flexible enough to tap this creativity, it can yield incredible results.”

Quigley himself found a photographer and brand expert in a single afternoon after asking for a referral within the community. Chatbooks’ work policies, which emphasize flexibility and time with family, have helped fuel the company’s breakout success. Now that workers can use mobile- and cloud-based tools to produce everything from new versions of a product to high-quality video content regardless of location, Utahns are proving their mettle as a workforce suited for today’s on-demand economy.

The new, younger batch of entrepreneurs making their way into the limelight are digital natives who grew up on social media and iPhones. They are UX naturals who excel at giving consumers something they want to use (and offering a good reason for consumers to pay for something of value). Consumer startups have easy access to the marketing, branding, and advertising talent they need in order to go big and stay relevant in the long run. They are also finding it increasingly unnecessary to be located in a coastal hub.

As longtime Utah venture investors, we are not moving away from enterprise software anytime soon. But Utah has proven its future extends beyond B2B. We are excited to back both consumer-facing and enterprise software companies to help grow the state through its next chapter as a diverse national and international tech powerhouse.